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Ambow Education Announces Second Quarter 2018 Financial Results

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Ambow Education Announces Second Quarter 2018 Financial Results

PR Newswire

- Net Revenues Increases 19.5% to $22.7 Million
- Net Income Increases 47.1% to $5.0 Million -

BEIJING, Aug. 30, 2018 /PRNewswire/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE:AMBO), a leading national provider of educational and career enhancement services in China, today announced its unaudited financial and operating results for the three-month and six-month periods ended June 30, 2018.

Second Quarter 2018 Financial Highlights

  • Net revenues for the second quarter of 2018 increased by 19.5% to US$22.7 million from US$19.0 million in the same period of 2017. This increase was due primarily to recording US$2.9 million in revenue from Boston-based Bay State College (acquired by Ambow in November 2017), higher student enrollment for the 2017-2018 academic year in the Company's K-12 schools, and growth of Ambow's smart office solution business.
  • Gross profit for the second quarter of 2018 was US$10.8 million, compared with US$10.4 million for the same period of 2017. Gross profit margin was 47.6% for the second quarter of 2018, compared with 54.7% in the same period of 2017.
  • Operating expenses in the second quarter of 2018 decreased by 2.9% to US$6.8 million from US$7.0 million for the same period of 2017. Operating expenses as a percentage of net revenues for the quarter decreased to 30.0% from 36.8% in the same period of 2017, primarily due to stringent cost controls.
  • Net income attributable to ordinary shareholders for the second quarter of 2018 was US$5.0 million, or US$0.13 per basic and US$0.12 per diluted share, representing a 47.1% increase from a net income of US$3.4 million, or US$0.09 per basic and diluted share, in the second quarter of 2017.
  • As of June 30, 2018, Ambow maintained strong cash resources of US$58.2 million, comprising cash and cash equivalents of US$31.5 million, short-term investments of US$26.3 million, and restricted cash of US$0.4 million.

First Six Months 2018 Financial Highlights

  • Net revenues for the first six months of 2018 increased by 27.1% to US$38.5 million from US$30.3 million in the first six months of 2017, due primarily to recording US$6.5 million in revenue from Boston-based Bay State College, higher student enrollment for the 2017-2018 academic year in the Company's K-12 schools, and growth of Ambow's smart office solution business.
  • Gross profit for the first six months of 2018 increased by 13.4% to US$16.1 million from US$14.2 million in the first six months of 2017. Gross profit margin was 41.8%, compared with 46.9% in the same period of 2017.
  • Operating expenses for the first six months of 2018 was US$13.5 million, relatively flat compared with US$13.6 million in the first six months of 2017. Operating expenses as a percentage of net revenues for the period decreased to 35.1% from 44.9% in the same period of 2017, primarily due to stringent cost controls.
  • Net income attributable to ordinary shareholders for the first six months was US$4.0 million, or US$0.10 per basic and diluted share, representing a 263.6% increase from a net income of US$1.1 million, or US$0.03 per basic and diluted share, in the first six months of 2017.

"We are pleased with our solid financial results for the second quarter as we continue to streamline our business," said Dr. Jin Huang, Ambow's Chief Executive Officer. "Ambow's college and corporate partnerships and curriculum offerings continue to expand, allowing us to add more desirable technology programs and training courses to meet the demand fueled by China's booming IT and technology-driven economy. In addition to the robust results for this quarter, we have successfully returned to a national securities exchange with our listing on the NYSE American, which has renewed the recognition of Ambow's core value and the strength of our business model."

"As we announced earlier, we have brought a strong management team to Bay State College, and we expect our new team to accelerate the progress of our curriculum offerings, which are tailored to provide dual China and U.S. diplomas for the 2019 fall semester. We are confident that Ambow and Bay State are well-positioned to capitalize on the growing interest among the large base of Chinese students who want to obtain a U.S. university degree. Through Bay State we are establishing a new business model for expanding the cooperation between China and U.S. colleges and servicing the growing demand for studying abroad."

Ambow will participate in the upcoming BMO Capital Markets 18th Annual Back to School Conference to be held at the New York InterContinental Barclay Hotel. The Company will present at 2:30 PM ET on Thursday, September 13, 2018. Management will also host one-on-one meetings with investors throughout the conference.

The Company's second quarter 2018 performance can also be found on its Form 6-K filing at www.sec.gov.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all amounts translated from RMB to U.S. dollars for the second quarter and the first half of 2018 are based on the effective exchange rate of 6.6171 as of June 29, 2018; all amounts translated from RMB to U.S. dollars for the second quarter and the first half of 2017 are based on the effective exchange rate of 6.7793 as of June 30, 2017. The exchange rates were according to the middle rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.

About Ambow Education Holding Ltd.

Ambow Education Holding Ltd. is a leading national provider of educational and career enhancement services in China, offering high-quality, individualized services and products. With its extensive network of regional service hubs complemented by a dynamic proprietary learning platform and distributors, Ambow provides its services and products to students in 30 out of the 31 provinces and autonomous regions within China.

Follow us on Twitter: @Ambow_Education

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements.  Among other things, the outlook and quotations from management in this announcement, as well as Ambow's strategic and operational plans, contain forward-looking statements. Ambow may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements, including but not limited to the following: the Company's goals and strategies, expansion plans, the expected growth of the content and application delivery services market, the Company's expectations regarding keeping and strengthening its relationships with its customers, and the general economic and business conditions in the regions where the Company provides its solutions and services. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Ambow undertakes no duty to update such information, except as required under applicable law.

For investor and media inquiries please contact:

Ambow Education Holding Ltd.
Tel: +86-10-6206-8000

The Piacente Group | Investor Relations
Tel: +1 212-481-2050 or +86 10-5730-6200
Email: ambow@tpg-ir.com


AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share and per share data)



As of June 30,


As of December 31,


2018


2017


US$


RMB


RMB

ASSETS






Current assets:






Cash and cash equivalents

31,464


208,201


195,303

Restricted cash

355


2,350


2,350

Short term investments, available for sale

2,602


17,219


128,042

Short term investments, held to maturity

23,726


157,000


93,000

Accounts receivable, net

3,238


21,424


24,511

Prepaid and other current assets, net

21,454


141,960


129,517

Loan receivable, current

6,450


42,677


-

Total current assets

89,289


590,831


572,723

Non-current assets:






Property and equipment, net

24,652


163,127


168,423

Land use rights, net

276


1,826


1,848

Intangible assets, net

14,279


94,486


96,769

Goodwill

11,057


73,166


73,166

Deferred tax assets, net

1,850


12,242


8,222

Long-term loan receivables

-


-


42,677

Other non-current assets, net

1,879


12,432


13,592







Total non-current assets

53,993


357,279


404,697







Total assets

143,282


948,110


977,420







LIABILITIES






Current liabilities:






Deferred revenue  *

15,660


103,623


114,396

Accounts payable  *

2,383


15,779


23,414

Accrued and other liabilities  *

50,562


334,576


418,998

Borrow from third party, current  *

6,000


39,700


-

Income taxes payable  *

31,078


205,643


202,314

Amounts due to related parties  *

518


3,430


3,430

Total current liabilities

106,201


702,751


762,552

Non-current liabilities:






Long-term borrowings from third party

-


-


39,205

Consideration payable for acquisitions

1,023


6,766


6,766

Other non-current liabilities

263


1,741


2,938







Total non-current liabilities

1,286


8,507


48,909







Total liabilities

107,487


711,258


811,461







EQUITY






Preferred shares






(US$ 0.003 par value;1,666,667 shares authorized, 
nil issued and outstanding as of June30, 2018 and 
December 31, 2017) 

-


-


-

Class A Ordinary shares






(US$0.003 par value; 66,666,667 and
     66,666,667 shares authorized, 34,206,939
     and 38,407,313 shares issued and
     outstanding as of December 31, 2017 and
     June 30, 2018, respectively)

109


721


640

Class C Ordinary shares






(US$0.003 par value; 8,333,333 and 8,333,333
     shares authorized, 4,708,415 and 4,708,415
     shares issued and outstanding as of
     December 31, 2017 and June 30, 2018,
     respectively)

14


90


90

Additional paid-in capital

529,079


3,500,968


3,456,307

Statutory reserve

3,028


20,036


20,036

Accumulated deficit

(497,267)


(3,290,465)


(3,316,715)

Accumulated other comprehensive income

1,324


8,762


6,876

Total Ambow Education Holding Ltd.'s equity

36,287


240,112


167,234

Non-controlling interests

(492)


(3,260)


(1,275)

Total equity

35,795


236,852


165,959

Total liabilities and equity

143,282


948,110


977,420







*  All of the VIE's assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of
consolidating these VIEs do not represent additional claims on the Company's general assets.

 

 

AMBOW EDUCATION HOLDING LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands, except for share and per share data)



For the six months ended June 30,


For the three months ended June 30,


2018


2018


2017


2018


2018


2017


US$


RMB


RMB


US$


RMB


RMB













NET REVENUES












 Educational program and
     services

37,660


249,202


205,379


22,335


147,791


128,629

Intelligent program and
    services

874


5,783


-


365


2,415


-

Total net revenues

38,534


254,985


205,379


22,700


150,206


128,629

COST OF REVENUES












 Educational program and
     services

(21,802)


(144,268)


(109,120)


(11,514)


(76,192)


(58,325)

Intelligent program and
     services

(593)


(3,922)


-


(377)


(2,496)


-

Total cost of revenues

(22,395)


(148,190)


(109,120)


(11,891)


(78,688)


(58,325)













GROSS PROFIT

16,139


106,795


96,259


10,809


71,518


70,304

Operating expenses:












Selling and marketing

(2,906)


(19,227)


(19,190)


(1,363)


(9,022)


(8,973)

General and administrative

(10,451)


(69,155)


(70,341)


(5,420)


(35,863)


(36,695)

Research and development

(125)


(827)


(2,712)


(58)


(384)


(1,453)

Total operating expenses

(13,482)


(89,209)


(92,243)


(6,841)


(45,269)


(47,121)













OPERATING INCOME

2,657


17,586


4,016


3,968


26,249


23,183













OTHER INCOME (EXPENSES)












Interest income

556


3,676


2,743


240


1,586


1,711

Foreign exchange gain, net

20


135


1


18


121


4

Other income (loss), net

140


925


(909)


107


711


(920)

Gain on cancellation of
     subsidiaries

487


3,220


-


64


423


-

Gain on sale of investment
     available for sale

73


484


4,569


28


186


463

Total other income

1,276


8,440


6,404


457


3,027


1,258

INCOME BEFORE INCOME
  TAX AND NON-
  CONTROLLING
  INTEREST

3,933


26,026


10,420


4,425


29,276


24,441

Income tax benefit (expense)

26


174


(4,009)


588


3,893


(2,042)













NET INCOME

3,959


26,200


6,411


5,013


33,169


22,399

Less: Net (loss) attributable to
     non-controlling interest

(8)


(50)


(1,112)


(22)


(143)


(544)













NET INCOME
  ATTRIBUTABLE TO
  ORDINARY
  SHAREHOLDERS

3,967


26,250


7,523


5,035


33,312


22,943













NET INCOME

3,959


26,200


6,411


5,013


33,169


22,399













OTHER
     COMPREHENSIVE
     INCOME, NET OF TAX












Foreign currency translation
     adjustments

265


1,753


296


(230)


(1,523)


483

Unrealized gainson short term
     investments












  Unrealized holding gains
     arising during period

57


380


751


26


173


396

  Less: reclassification
     adjustment for gains
     included in net income

37


247


2,640


16


104


141

Other comprehensive income
     (loss)

285


1,886


(1,593)


(220)


(1,454)


738













TOTAL
     COMPREHENSIVE
     INCOME

4,244


28,086


4,818


4,793


31,715


23,137













Net income per share - basic

0.10


0.67


0.19


0.13


0.83


0.59













Net income per share - diluted

0.10


0.66


0.19


0.12


0.83


0.58













Weighted average shares used
     in calculating basic net
     income per share

39,464,021


39,464,021


38,772,667


39,996,374


39,996,374


38,815,802













Weighted average shares used
     in calculating diluted net
     income per share

39,805,975


39,805,975


39,312,231


40,324,108


40,324,108


39,311,705

 

Cision View original content:http://www.prnewswire.com/news-releases/ambow-education-announces-second-quarter-2018-financial-results-300704707.html

SOURCE Ambow Education Holding Ltd.

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